RBC note on $RSPP
The company trades in line (2019 Enterprise Value/EBITDA) with Permian peers but has one of the best debt-adjusted production growth outlooks among peers. Cash margins per boe are also amongst the best in the industry. There is visibility for 30%+ growth in 2018 and 2019 at cash flow levels assuming $50-55/bbl. We expect management to remain disciplined, as it has demonstrated before, if oil prices weaken and maintain a cash flow neutral bias. We see further upside to our valuation through improving capital efficiency in the Delaware and expanding resource potential in both its operating areas.
RBC price target is $47.
RSP Permian Inc NYSE: RSPP · December 22, Close $40.17 ▲ 0.35 (0.88%)